Pacific Capital Bancorp (PCBC) Announces Deferral of Interest Payments on Trust Preferred Securities and Suspension of Cash Dividend

June 22, 2009 8:10 AM EDT

Pacific Capital Bancorp (Nasdaq: PCBC) has deferred regularly scheduled interest payments on its outstanding $69.4 million of junior subordinated notes relating to its trust preferred securities. The terms of the junior subordinated notes and the trust documents allow the Company to defer payments of interest for up to 20 consecutive quarterly periods without default or penalty. During the deferral period, the respective trusts will likewise suspend the declaration and payment of dividends on the trust preferred securities. Also during the deferral period, the Company may not, among other things and with limited exceptions, pay cash dividends on or repurchase its common stock or preferred stock nor make any payment on outstanding debt obligations that rank equally with or junior to the junior subordinated notes. Accordingly, the Company has also suspended the payment of cash dividends on its outstanding common stock and preferred stock.

The Company believes that the deferral of interest payments on the junior subordinated notes and the suspension of cash dividend payments on its common and preferred stock will preserve approximately $8.0 million per quarter (compared with the continuing level of interest and dividend payments in the first quarter of 2009) and bolster its capital ratios. As previously announced, Pacific Capital Bank, N.A. (the "Bank") must maintain a minimum Tier 1 leverage ratio of 8.5% as of June 30, 2009 and 9.0% as of September 30, 2009, and a minimum total risk-based capital ratio of 11.0% as of June 30, 2009 and 12.0% as of September 30, 2009. [SM]

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